An Optimized Transshipment System Using -Two-Period Adjustment Contracts：A Case of Comicfans Co.Ltd

Abstract

Abstract:

A two-period production and inventory distribution problem for a supply chain consisting of a single supplier and multiple retailers is focused on. In the first period, the supplier produces according to the submitted order quantities. In the second period, inventory can be re-distributed among the retailers using a two-period adjustment contract. Under this contract, each retailer can either buy additional inventory from the supplier or sell back excess inventory to the supplier, delivery occurring only between the retailers. A mathematical optimization model is built for the semi-decentralized system, centralized in vertical direction and decentralized in horizontal direction. A case analysis method is then applied to compare the optimization effect under centralized, semi-decentralized and decentralized systems. The results show that centralized system is the best (13%), but is difficult to achieve; and that whether semi-decentralized system is better than decentralized system depends on the gap between the wholesale price and production cost in contract, namely, the smaller the gap, the better the optimization effect (3.39%).

Key words: supply chain management, two-period adjustment contracts, optimized transshipments, semi-decentralized system

ZHANG Xianfeng. An Optimized Transshipment System Using -Two-Period Adjustment Contracts：A Case of Comicfans Co.Ltd[J]. Industrial Engineering Journal .

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